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Why I didn’t get insurance: My boomerang child moved home



One Impatient reader thought Obamacare was his chance to get insurance. His plan was foiled in part when his adult daughter and her fiancé moved home.
One Impatient reader thought Obamacare was his chance to get insurance. His plan was foiled in part when his adult daughter and her fiancé moved home.
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Peter Schuyler was excited about the promise of the Affordable Care Act.

He had not had insurance since he moved to California about six years ago, and was subsequently dropped from his insurance plan because he had a pre-existing condition - a history of grand mal seizures.

Obamacare, he thought, was his chance to finally get insurance coverage again. His plans were foiled, though, in part because his 27-year-old daughter and her fiancé moved back home about two years ago.

Grey area

Though he tried to make it work, Schuyler, 64, said he couldn't afford to pay $940 each month for the catastrophic insurance he bought for himself and his wife on the Covered California marketplace, plus another $1,500 a month for his daughter's expenses. (She's not working, he said, and he's covering her doctor's fees, phone bill, car insurance, gas costs and spending money.)

Schuyler said he was denied premium assistance based on his income – even though it doesn't reflect the amount he spends on his daughter each month. He said he didn't think it was possible to claim his daughter or her fiancé on his taxes.

For all those reasons, he and his wife are still uninsured; he's waiting to enroll in Medicare next year.

"It's extremely frustrating that I kind of looked forward to this being the answer," Schuyler told Impatient. "I don’t know if anyone else has fallen into the grey area or not."

RELATED: What Obamacare? Some Californians choosing to stay uninsured

'Surprisingly common'

I took this question to George Brandes, director of health care programs at Jackson Hewitt tax service in Nashville. How common is it for adult children to move home, and unintentionally alter their parent’s ability to purchase insurance, I asked him. And is there anything Peter, and others in his situation, can do?

"It is surprisingly common and has a couple of impacts," Brandes told me. Roughly three in 10 adults, ages 25-34, moved in with their parents at some point during the recent recession, and these so-called "boomerang children" are disproportionately uninsured, he wrote in an Oct. 2013 publication on the topic.

Some possible solutions:

If Schuyler and his wife live close to the poverty level, then his daughter and her fiancé could be considered part of his "Medicaid household," which could push all the household members into an income range that would make them eligible for Medi-Cal, Brandes said. Medi-Cal enrollment is year-round, so the whole family could access coverage through the state’s Medicaid system immediately.

But that's probably not a possibility for Schuyler, who makes enough money that he and his wife did not qualify for a premium assistance tax credit. But if Schuyler added his daughter and her fiancé as tax dependents on his 2014 tax return (assuming they have little or no additional income) it might make them all eligible for tax credits on the insurance exchange, and might make insurance coverage more affordable, Brandes said.

If they pursue that path, Brandes continued, then their first step should be to speak with an enrollment counselor, to determine if there's been a "qualifying life event" that would allow them to enroll in subsidized insurance now, even though the open enrollment season has ended, and won't reopen until the fall. They should also speak with a tax advisor about the potential tax implications of claiming his daughter and her fiancé, he said.

What kind of tax implications? For example, if Schuyler adds the two as dependents – and then they don’t buy insurance – then the whole household could be subject to the ACA tax penalty, which this year is $95 per uninsured member or 1% of your household’s taxable income, whichever is greater.

Has your adult child moving back home affected your ability to purchase health insurance? Tell us about it in the comment section below, or e-mail us at Impatient@scpr.org.